Friday, October 12, 2007

Rewards For Failure

In the private sector, failed managers get fired without compensation*. In the public sector they are bribed with massive piles of our dosh to "resign".

We now learn that the resigned head of the NHS trust that runs Kent and Snuff It Hospital is in line for a £400,000 hand-out, which is nearly three times her annual salary. Johnson has reportedly stopped it, but whether he is legally entitled to do that remains to be seen.

As regular BOM readers will know, the reason taxpayers have to make these huge resignation payouts is that public sector "performance management" is so pants (eg see this blog). Underperforming staff- especially at senior levels- are almost never confronted about their shortcomings. Nobody wants to have such difficult conversations, so absolutely nothing gets done.

The result is that performance problems are never gripped, and our public services suffer the consequences.

But the real cherry on the cake is that because of the government's own employment protection legislation, heavily loaded in favour of protecting poor performers, organisations can only fire people if they have established a proper audit trail to demonstrate "performance management" over a lengthy period. In particular, they need filed documentation of structured performance interviews and warning letters delivered to the individual concerned.

These virtually never exist at senior levels of the public sector. From the hopeless National Patient Safety Agency's Two Sues, to the hopeless Rural Payment Agency's Johnstone Mcneill, to the hopeless Maidstone and Tunbridge Wells NHS Trust's Rose Gibb, the only way of getting shot of hopeless management is for us taxpayers to pay out even more money.

Even though we're the ones who've suffered from the crap service in the first place.

*Footnote- Yes we know some failed managers in the private sector have also copped some eye-watering Golden Goodbyes (see here for Paul Foot's measured take on the disastrous Peter Davis's multi-million exit from Sainsburys). But in general, they reflect contractural golden parachute entitlements these sleek moggies had the good sense to negotiate on their way into their jobs (as was the case with Davis). As far as I'm aware, that's never the case with public sector jobs. Sure, as a Sainsbury's shareholder, you'd be mightily hacked off, which is why they and other PLC's have tightened things up for the future. But it's not something we taxpayers should lose sleep over.

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Despite all the talk of cuts, government still consumes nearly half our national income. Yet many tens of billions of its spending is wasted, with taxpayers made to pick up the tab for a depressing array of overpriced sub-standard services. This is money we can no longer afford, and our National Debt is already at danger level.

If we're to avoid further decades of stagnation and austerity we urgently need to find another way. Exposing and understanding the wastefulness of government is a necessary step in the right direction.